Where's the bottom?

So I have already touched on the indicators I used that signaled the big downturn in the economy. Now that I said "I am out!", now what? Here I am just sitting on the sidelines, not making any money, but not losing any money either. The first part of the recession was pretty easy to watch, kind of like watching 20,000 Leagues Under the Sea. The only volatility was if the market dropped 1% or 5% in a day. Nothing that pointed toward a bottom. Then there was a light at the end of the tunnel. Volatility mixed with irrational behavior! Whooo Hoooo!

Probably the best advise a professor ever gave me in college was that the current price, be it stocks, commodities, currency, is already factoring in the future. HUH? This just means that even though the economy on main street had not hit bottom, the stock prices have already factored in a further economic retraction. Everybody knew we were in a recession and it was going to take a while to dig out of it. So once almost everyone was assuming this, the price had naturally established a bottom. This can be seen in the fact that the Dow and S&P hit their bottom before we were officially in a recession.

If everyone knew, then why was there so much volatility at the bottom. I guess that just gets into the battle of the bulls and the bears on wallstreet. Analysts just feed the frenzy trying to push their position. Don't let all this static make you over think. Just pick a target price, stick to your plan, and don't lose sleep if you didn't quite hit the absolute bottom, or the top for that matter.